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  Listing Council Decision 2007-15
Identification Number 625
Rule 4310(c)(14): The issuer shall file with NASDAQ three (3) copies of all reports and other documents filed or required to be filed with the Commission. This requirement is considered fulfilled for purposes of this paragraph if the issuer files the report or document with the Commission through the Electronic Data Gathering, Analysis, and Retrieval system. An issuer that is not required to file reports with the Commission shall file with NASDAQ three (3) copies of reports required to be filed with the appropriate regulatory authority. All required reports shall be filed with NASDAQ on or before the date they are required to be filed with the Commission or appropriate regulatory authority. Annual reports filed with NASDAQ shall contain audited financial statements.
Issue: The company was not able to file its delinquent periodic SEC reports due to the need for additional time for company management to complete the assessment of the effectiveness of its internal control over financial reporting as of December 31, 2006 in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. Based on a Panel decision, the company was scheduled to be suspended, pending delisting, by the Panel, because the Panel was at the limit of its discretionary authority. The Listing Council exercised its discretionary authority to call the Panel’s decision for review and stay any future Panel determinations to suspend the company’s securities from trading, pending further action by the Listing Council.
Determination: The decision of the Panel was appropriate at the time it was rendered. The Listing Council also uses its discretionary authority to grant the company an additional 60 day extension of time to demonstrate compliance with all Global Market continued listing requirements In reaching its determination, the Listing Council applied a facts and circumstances analysis, and found that based on its analysis, that this company should be given additional time to become compliant with NASDAQ’s filing requirement.
The Listing Council considered many factors, including, but not limited to, the following:
  • The company reacted quickly and took appropriate steps once the problem was identified.
  •  There is no suggestion of wrongdoing by the company or any of its senior management.
  • The company promptly notified the investing public of its inability to file its Form 10-K for the fiscal year ended December 31, 2006, and kept the investing public informed of its financial results.
  • The company has taken remedial action to bolster its internal control processes and to prevent the reoccurrence of events that led to the filing delinquencies.
  • The company has filed its Form 10-K for the fiscal year ended December 31, 2006.
The Listing Council also considered that the company was not in any other distress, appeared positioned to promptly file its remaining delinquent reports and, based upon historical financial information, appeared to have the financial strength to continue to meet the maintenance standards of the Global Market. The Listing Council understands that the accounting analysis was, in part, slowed by issues at its former audit firm, who at the termination of the relationship did not have a disagreement on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. The Listing Council was also particularly cognizant, and considered, that the Panel had exhausted its ability to provide the company with an additional extension of time, and would have provided the company more time if available under the rules. While the Listing Council takes seriously the requirement to file accurate and reliable financial statements and the concomitant purpose to provide investors with current information, the Listing Council balances its analysis with the facts and circumstances of each case before it. The Listing Council is sympathetic to the company in that the issues surrounding its filing delinquencies arise from technical accounting issues not related to its operations and that the delays in meeting the Panel’s deadline were, in part, beyond the company’s control. Notwithstanding the unforeseen delays, the Listing Council notes that the company has filed its Form 10-K for the fiscal year ended December 31, 2006, and anticipates filing the delinquent 2007 Forms 10-Q by mid-January. Based upon the record, the Listing Council recognized that the company has been pro-active in trying to regain its status as a goodcorporate citizen, and believed that such diligence should be rewarded with an extension of time to demonstrate compliance.
As such, pursuant Listing Rule 4802(b), the Listing Council finds that it is appropriate in this instance to exercise its discretionary authority and provide the company with a short extension of time to demonstrate compliance with Listing Rule 4310(c)(14). Based on the foregoing, the Listing Council affirms the decision of the Panel to suspend the company’s securities, and grants the company an exception of 60 days to file its delinquent periodic reports and restatements.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 625
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